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Informist, Thursday, Apr. 17, 2025

MUMBAI – Information technology stocks are expected to be highly volatile in the upcoming week with major large-cap and mid-cap IT companies scheduled to announce their March quarter earnings. These reactions, which will be on account of the quarterly earnings for Jan-Mar and guidance by companies for the June quarter and 2025-26 (Apr-Mar), will be short lived, analysts said.

"IT stocks will be the focus next week...it will all start with Infosys reaction and will end with mid-cap stocks in focus," Rishubh Vasa, research analyst at Indsec Securities, said. Earlier on Thursday, Infosys gave a weak revenue growth projection for FY26 at 0-3% in constant currency terms while retaining its estimate for operating margin at 20-22%. The company also reported a 2% sequential fall in revenue, led by weakness in key verticals – retail, energy, utilities, resources and services, and life sciences. The company's net profit, on the other hand, rose 3.3% on quarter and was above analysts' estimate. 

Technically, Nifty IT index is expected to remain range-bound in the upcoming week, Jatin Gedia, technical research analyst at Mirae Asset Sharekhan, said. He expects the index to find support at 31800 and resistance at 34500 levels. 

On Thursday, the IT index fell as much as 2.5%, dragged down by Wipro's weak guidance for the June quarter and US Federal Reserve chief Jerome Powell's comments early Thursday regarding a potential slowdown in the US economy due to tariffs. Wipro's guidance of a sequential 1.5-3.5% fall in its revenue from IT services for Apr-Jun was a bit "harsh" than expected, Vasa said. Following this, the stock fell as low as 6.3% but ended 4.3% lower.

Weakness in the tech space was reflected in Nifty IT's performance compared to the benchmark. While Nifty 50 gained 4.5% this week, the Nifty IT grew only 1.9% to end at 33372.35 points on Thursday. Barring Wipro and LTIMindtree, all other constituents of the index rose over the week, with Mphasis and Persistent Systems rising over 5% each. 

Most of the stock prices are pricing in a tepid June quarter and a weaker FY26, Vaibhav Chechani, research analyst at Nirmal Bang Institutional Equities, said. He expects the IT stocks will further correct 10% from current levels and not beyond that level. Vasa, however, expects IT stocks to largely consolidate till the tariff-war settles down. 

"The real game will start from October when the US government comes up with the new budget... lot of impetus will come from project announcement made during the budget... Projects cancellations as part of negotiations that one will see will all be renegotiated and new projects will be reassigned," Vasa said. 

Major IT companies, including HCL Technologies, Tech Mahindra and LTIMindtree, and mid-cap companies including MphasiS, Persistent Systems and Tata Technologies will announce their earnings next week. Choice Institutional Equities expects these companies to give cautious guidance in line with the guidance given by its large-cap peers.

TOP HEADLINES

* Brokerages downgrade Wipro's rating amid bleak FY26 revenue outlook
* Sonata Software says Jan-Mar international revenue to fall short of forecast
* Analyst Concall: Wipro Apr-Jun revenue guidance factors in macro uncertainty
* Earnings Outlook: Muted qtr seen for Infosys on slow deal wins, weak season
* Earnings Outlook: Weak demand, client caution may drag Tata Elxsi's revenue
* One client paused deal so far to save cash amid tariff turmoil, says Wipro
* Earnings Review: Wipro Jan-Mar PAT, sales up QoQ; sales misses Street view
* Wipro sees Apr-Jun IT services sales falling 1.5-3.5% in constant currency
* Infosys to transform Spark New Zealand's technology delivery model
* Earnings Outlook: Weak demand seen weighing on Wipro's Jan-Mar revenue, PAT
* IPO Alert: Seshaasai Tech gets SEBI nod for fresh issue, OFS
* Intellect Design unit in pact with Essel Mining to redefine procurement ops
* HCL Tech integrates NVIDIA AI Enterprise and Omniverse with GenAI solutions
* Cyient bags order from Norway-based co for development of hydrogen mfg plant
* HCL Tech, Google Cloud launch Agentic AI solutions
* Corporate affairs ministry approves change in Affle India's name to Affle 3i
 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Arya S. Biju

Edited by Deepshikha Bhardwaj

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